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New Notes - A complete set of financial statements should have which of the following 1 Income Recent difficulties in the American airline industry

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A complete set of financial statements should have which of the following: 1) Income Statement 2) Ending Balance Sheet 3) Beginning Balance Sheet 4) Cash Flow Statement A premise for value is: Going Concern Cost of Capital (COC) has which if the following characteristics:1) Cost of Capital is the expected rate of return that the market requires to attract funds to a particular investment 2) In economic terms, COC is the opportunity cost of funds 3) COC is market driven - the cost is the competitive rate of return available in the market on a comparable investment 4) Risk is the key distinction when considering alternative investment's returns. 5) Each component ofa capital structure has a separate COC: all but "Each component of a capital structure has a separate COC False: The approaches to value are to be exclusively in any value analysis, because the results are not comparable and will never relate to each other . False: The subject of the valuation is the specific asset or interest being values False: There are 6 tests for making sure financial statements are complete False: The IRS likes 3 years of financial history and a 3 year financial forecast for a good valuation analysis False, Not economic risk: Risk is divided into 4 categories: 1) Maturity Risk 2) Systematic Risk 3) Unsystematic risk 4) Economic risk FASB 157 adopts as the standard of value for financial reporting: Fair Value In business Valuation, Financial forecasting is used to compute which one: Free Cash Flow In business Valuations, the plug in the financial forecast is generally: Cash Accountant The value of a company is the function of three variables, which are: 1) Economic Benefit Stream: Free Cash Flow 2) Expected Growth Rates 3) Cost of capital, including risks (discount rate) True: Care must be taken not to double count risk in a valuation analysis True: In valuing a company analysts need to estimate sustainable growth into perpetuity, not just short-term growth True: Working Capital is part of the business operations rather than capital structure when valuing a company True: Models should have only formulas and references in the statement portion True: DCF stands for an income approach method True: The value of a subject is the present value of its expected economic benefit(s) Which of the following are elements of DCF: 1) Projected Future operating Cash Flows 2) Operating Terminal Value 3) Discount Rate 4) Discounted Values of the projected cash flows and the terminal value 5) Apportion to the subject being valued 6) Adjust for Premia or discount: All of them Which of the following is/are Valuation Method: 1) Discounted Cash Flow 2) Liquidation Asset Value 3) Capitalized Free Cash Flow 4) Price Earnings Ratio Discount rates for determining discounted cash flows from operations in nations with high political risk should be greater than in nations with less political risk. True A significant risk of business cycles is more likely to occur in the U.S. than in emerging
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This note was uploaded on 02/21/2012 for the course ACT 492 taught by Professor Ngo during the Fall '11 term at Colorado.

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New Notes - A complete set of financial statements should have which of the following 1 Income Recent difficulties in the American airline industry

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